Correlation Between News and HF SINCLAIR
Can any of the company-specific risk be diversified away by investing in both News and HF SINCLAIR at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining News and HF SINCLAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between News Corporation and HF SINCLAIR P, you can compare the effects of market volatilities on News and HF SINCLAIR and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in News with a short position of HF SINCLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of News and HF SINCLAIR.
Diversification Opportunities for News and HF SINCLAIR
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between News and HL80 is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding News Corp. and HF SINCLAIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF SINCLAIR P and News is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on News Corporation are associated (or correlated) with HF SINCLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF SINCLAIR P has no effect on the direction of News i.e., News and HF SINCLAIR go up and down completely randomly.
Pair Corralation between News and HF SINCLAIR
Assuming the 90 days trading horizon News Corporation is expected to under-perform the HF SINCLAIR. But the stock apears to be less risky and, when comparing its historical volatility, News Corporation is 1.63 times less risky than HF SINCLAIR. The stock trades about -0.02 of its potential returns per unit of risk. The HF SINCLAIR P is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,188 in HF SINCLAIR P on December 22, 2024 and sell it today you would lose (108.00) from holding HF SINCLAIR P or give up 3.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
News Corp. vs. HF SINCLAIR P
Performance |
Timeline |
News |
HF SINCLAIR P |
News and HF SINCLAIR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with News and HF SINCLAIR
The main advantage of trading using opposite News and HF SINCLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if News position performs unexpectedly, HF SINCLAIR can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HF SINCLAIR will offset losses from the drop in HF SINCLAIR's long position.News vs. Constellation Software | News vs. Benchmark Electronics | News vs. Richardson Electronics | News vs. KIMBALL ELECTRONICS |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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